FSC issues legislative notice of amendments to crypto rules, tightening entry requirements and expanding AML obligations

South Korea’s Financial Services Commission (FSC) has unveiled amendments that would tighten entry regulations for virtual asset service providers (VASPs) and expand anti-money laundering (AML) obligations for virtual asset transfers.

On the 30th, the FSC said in a press reference that it has prepared amendments to the Enforcement Decree and supervisory regulations of the Act on Reporting and Using Specified Financial Transaction Information and has initiated the legislative notice process. The move is aimed at refining detailed rules in line with the Act’s revision in February.

A key pillar of the amendments is tougher entry requirements for VASPs. The proposal expands the scope of major shareholder screening, specifies requirements for financial soundness and social credibility, and clearly stipulates requirements for internal control systems and compliance personnel.

The package also includes measures to broaden AML rules for virtual asset transfer transactions. The information-sharing obligation (the “travel rule”), previously applied only to transactions of at least 1 million won, would be extended to transactions below 1 million won, while recipient service providers would also be required to secure the relevant information.

In addition, transactions with overseas VASPs and personal wallets would be subject to a principle of limited permissibility, and transactions of 10 million won or more would have to be reported as suspicious transactions regardless of risk level.

The amendments will undergo a legislative notice and public comment period from March 30 through May 11, after which the FSC plans to complete the revision in July following procedures including review by the Regulatory Reform Committee and the Cabinet. Provisions delegated by law will take effect on Aug. 20.